SAINT PAUL, MN – Two recent investigations conducted by the Department of Commerce Fraud Bureau uncovered insurance “policy mill” schemes that resulted in felony insurance fraud and forgery charges against individuals who masqueraded as insurance agents bilking their customers out of cash and insurance coverage.

The growth of internet sales for insurance policies has provided opportunity for criminals to prey on consumers. These policy mill schemes typically involve an individual posing as a trusted insurance agent, who then uses the consumer’s information to apply for insurance policies online. Many companies issue temporary insurance cards once the application is completed, which these criminals give to their victims as proof that they have purchased “legitimate” insurance policies, when in fact, they have not. Since the policy premiums are paid with fictitious credit card or bank information, the criminal pockets the cash and the policies are cancelled by the insurance company for non-payment, leaving the victims without their cash or insurance.

“These criminals will go to great lengths and use sophisticated techniques to scam and defraud consumers,” said Commerce Commissioner Mike Rothman. “I urge consumers to educate themselves on who they are doing business with and check their license at the Department of Commerce website.”

In the case of Byron Joseph Davis of New Hope, Minnesota, who was charged with one count of felony theft and a felony count of forgery, he allegedly using the name, “Julian King” when posing as a Progressive Insurance agent, promising clients policies at a discount with an up-front cash payment. After collecting money for the policy premiums, Davis, who has an extensive criminal history, would keep the cash for himself, using fictitious credit card information to pay for the policies. In most of the incidents, the victims received cancellation notices in the mail indicating they did not have insurance coverage, but when asked, Davis allegedly assured them that they had insurance and everything would be okay.

Earlier this summer, Marlon Anton Moore, known as “Ace Boogie” to his victims, was charged with five counts of felony forgery for allegedly acting as an independent insurance agent scamming unsuspecting victims through a policy mill scheme. The complaint reports that similar to Davis, Moore would accept cash up front for insurance policies he either fraudulently obtained or manufactured, deceiving clients who believed they were purchasing legitimate auto insurance. In this case, Moore who reportedly passed himself off as an agent for both Geico and Progressive auto insurance had a lucrative scam leading investigators into an investigation of over 250 fraudulent applications for insurance policies purchased online.

To protect yourself against insurance policy mill scams, check the Department’s License Lookup Tool to make sure the company or individual you are or will be working with is licensed to do business in Minnesota. If they are not licensed, do not give them any personal information – credit card or bank information – or cash, and report the individual to the Commerce Department. If you receive notification that your policy has been canceled due to lack of payment, contact the insurance company directly and ask why your policy has been cancelled.

If you suspect insurance fraud, call the Commerce Fraud Bureau tip line at 1-888-FRAUD MN (1-888-372-8366).

If you have questions about your policy or possible complaints, call the Department of Commerce Consumer Response Team (CRT). The CRT is comprised of investigators who respond to consumer phone calls specifically about insurance.